A less rosy future for the railway industry?

TPE at Huddersfield
Published Mon, 2015-06-29 10:09

The announcement by the Secretary of State for Transport, Patrick McLoughlin, on Thursday 24 June 2015 that a significant part of the proposed £38.5 billion investment in Britain’s railway infrastructure marks a significant shift in policy.


TransPennine Express Class 170 No 170302 stands in Huddersfield platform 8 working 1K22 16.42 Manchester Piccadilly to Hull on 31 March 2007. The government announcement means delays to electrification of the ex-LNWR route between Leeds and Manchester. ©

There was a certain inevitability about the announcement given the fact that Network Rail’s performance in delivering major projects on time and on budget had already been criticised. Cynics might regard the timing as interesting, given that it’s only just over six weeks since the election, but such massive investment was always likely to come under scrutiny for an administration that was elected on the promise of sweeping cuts to public expenditure. Cynics might also highlight the fact that key projects to benefit the north of England are those that have borne the bulk of the delays. The reality here, however, is that many of the key southern-based projects, such as Thameslink and Crossrail, are much more advanced. It will be interesting to see, nonetheless, what the future for Crossrail 2 and HS2 are under the current circumstances.
There was also going to be a major challenge for the railway industry in completing all of the schemes on time. The planned investment represented a massive boost to try and bring Britain’s 19th century railway infrastructure into the 21st century by reversing almost 50 years of under-investment. The challenges of trying to modernise a railway which possesses a significant number of historic structures cannot be over-estimated either. The fact that much of the Great Western main line is regarded as a UNESCO World Heritage Site means that the work involved in electrification has to be handled sensitively; it’s all very well seeing the Brunel train shed at Bristol as a suitable terminus for electric services to Paddington but it’s another issue when it comes to trying to ensure that the fabric of the structure of a listed building is not adversely affected.
There are likely to be other consequences over and above the loss of the headline projects as well given that all areas of investment may well have to be reviewed. Will be the avowed policy of concentrating all signalling into a limited number of regional signalling centres be delayed or deferred as well.  At the moment Network Rail has a moratorium effectively on the refurbishment of traditional signalboxes as the company expects these all to be replaced by the new centres; if this proves not to be the case, then work on the traditional signalling infrastructure may have to be revived. Will all the new rolling stock on order, much of which has been acquired on the basis of the rolling programme of electrification, still be required or will older rolling stock be forced to soldier on for longer, leaving more modern stock to be stored in sidings until required. There are distinct shades of the EMUs delivered for the original Bedford to St Pancras electrification scheme here (although the delays in their use was down more to a failure in industrial relations rather than a problem in the actual investment).
The loss of the electrification of the transpennine route is a blow for two major reasons. Firstly, it will make the concept of the ‘Northern Powerhouse’, in which George Osborne has invested a considerable amount of political capital, difficult to deliver. The Leeds-Huddersfield-Manchester corridor is one of the busiest routes in the country and one where extra capacity is needed if the ability of cities like Leeds and Manchester are to grow and to attract investment. Secondly, it makes operating the transpennine franchise more complex as a strategy that saw the key transpennine section electrified has been deferred.
The appointment of Sir Peter Hendy, previously the Commissioner of Transport for London, to the chairmanship of Network Rail is probably an astute move. In his previous position Sir Peter proved that he was able to oversee the delivery of major projects, most notably the successful handling of the Olympics in 2012. More importantly, perhaps, he has proved adept at working with a Conservative administration in the guise of London mayor Boris Johnson. With Network Rail now firmly back in the hands of the government, this skill will be important perhaps in ensuring that the relationship is as positive as possible.
Will Thursday’s announcement be the end of the story? Probably not. There have been rumours that Network Rail’s property portfolio will be disposed of, potentially raising up to £1 billion towards the reduction in Network Rail’s debt whilst NR’s management of 19 key stations may also be reviewed. The telecommunications industry is also interested in the possible sale of NR’s communications network and senior figures in industry have signalled a belief that Network Rail itself is too large and should be broken up.
To an extent the gradual restructuring of Network Rail is inevitable in any case; with increasing devolution to Scotland and Wales as well as the possible transfer of powers to the English regions, management — if not ownership — of the railway infrastructure closer to the locality seems likely.
In five years time, when the next general election comes around, many of the projects that are still progressing, such as the electrification of the Great Western main line, will be much further advanced or completed. Will voters in the north punish the Conservatives for the broken pledges over the transpennine and Midland routes? Possibly, but much of the north is a wilderness for the Conservatives in any case. Will the voters of the south and south-west, particularly those in the ex-LibDem seats that the Tories won in May 2015 be happier? Almost certainly and it’s these seats that the Tories need to retain next time to stand any chance of holding on to the keys of No 10.